Testable Implications of Pareto Efficiency and Individualrationality

This paper investigates the testable implications of Pareto efficiency and individual rationality on finite data sets in exchange economies with finitely many commodities and agents. Efficiency alone provides no restrictions other than a trivial “no waste”-condition. Efficiency together with individual rationality implies robust restrictionsI appreciate the comments of Don Brown, Truman Bewley and Charles Steinhorn. I also thank seminar participants at Yale, Zuerich and Mainz, as well as conference participants at the 12th European General Equilibrium Workshop in Bielefeld. The generous support of the Cowles Foundation is gratefully acknowledged. The paper also benefited greatly from the comments of an anonymous referee     

Sunspot cycles

Summary. This paper shows new properties about the equilibria of a stationary OG economy by establishing a connection between its stationary equilibria and those of a finite economy, with and without extrinsic uncertainty. Specifically, it shows the countability and local uniqueness with respect to the sup metric of the so-called sunspot cycles introduced here, that encompass both the deterministic cycles and the usual finite Markovian stationary sunspot equilibria. These sunspot cycles are, moreover, able to generate, at a lower cost in terms of assumptions than other sunspot equilibria, time series with the recurrent but irregular fluctuations typical of economic time series. Received: July 26, 2001; revised version: March 5, 2002 RID="*" ID="*" I want to thank an anonymous referee for comments that have helped greatly to improve this paper, as well as the comments about its contents received from several audiences in different seminars and conferences (the Economic Theory seminar of the University of Pennsylvania, the 2001 Meeting of the Econometric Society held at New Orleans, the 2000 Econometric Society World Congress, the 2000 Society for Economic Design Conference) and from comments to a previous paper, Dávila [10], specially from Jim Peck at the 1997 Workshop on General Equilibrium held at the University of Venice, that eventually lead to this one.     

Sequential bargaining and competition

Summary This paper studies a sequential bargaining model of a decentralised market. A main objective is to explore the conditions under which the unique subgame perfect equilibrium outcome of the market game approximates the Walrasian outcome of the market. The three main messages that emerge from our results are as follows. First, contrary to conventional wisdom, frictionless markets need not be Walrasian. Second, the relative magnitudes of frictions can have a profound impact on the market outcome even in the limit as the absolute magnitudes of the frictions become negligible. And third, the relative magnitudes of certain types of frictions may have to be significantly large in order for markets to be Walrasian, reflecting that certain types of frictions are needed in the market in order to induce the Walrasian outcome.This paper is based on a chapter of my Ph.D. thesis. I would like to thank Ken Binmore, David Canning, Partha Dasgupta and Frank Hahn for their helpful comments. I owe special thanks to Ariel Rubinstein for his comments, remarks and encouragement. The comments and suggestions of an anonymous referee have significantly improved the exposition at several places.     

Information,capital, and organization

Summary This paper examines on of the roles that information plays in the production process by looking at the information that firms collect about their workers. This information, concerning the worker's abilities, is used to improve the quality of job matches within the firm and reduce future production costs. This paper models this information as a capital good and shows how the existence of this capital good can be used to explain some of the residual firm value observed in equity markets as well as the rigidities observed when firms expand their scale.I would like to acknowledge the assistance of Edward Prescott, Hugo Hopenhayn, Herbert Mohring and Jim Schmitz who provided many insights and comments concerning this work. This paper has benefited from the comments and suggestions of seminar participants at Minnesota, Western Ontario and Caltech. This research was supported in part by grants from the Alfred P. Sloan Foundation and a National Science Foundation Graduate Fellowship.     

‘My Life Is Like a Novel’: Embodied Geographies of Security in Southeast Turkey

Scholarship at the development-security nexus has called for greater attention to space to better understand grounded encounters with security and insecurity. Through an examination of embodied engagements with space, this paper details the way migrant women in Southeast Turkey experience security and insecurity in their day-to-day lives in regards to gendered violence. Against the backdrop of state investment in gendered development as a mechanism of conflict mitigation, the reach and mobility of women in and across new spaces in the city has grown. At the juncture between these spaces – the classroom, courtroom, and home – lie conflicting narratives about nation, community, and family that pose implications for the physical well-being of women. To this end, interviews with migrant women and development administrators and teachers suggest that (human) security be understood as embodied and relational, experienced differentially across time and space.     

A theory of stopping time games with applications to product innovations and asset sales

Summary In this paper, the pure strategy subgame perfect equilibria of a general class of stopping time games are studied. It is shown that there always exists a natural class of Markov Perfect Equilibria, called stopping equilibria. Such equilibria can be computed as a solution of a single agent stopping time problem, rather than of a fixed point problem. A complete characterization of stopping equilibria is presented. Conditions are given under which the outcomes of such equilibria span the set of all possible outcomes from perfect equilibria. Two economic applications of the theory, product innovations and the timing of asset sales, are discussed.Parts of this paper were presented at seminars at Chicago, Rochester and Rutgers and we acknowledge helpful comments. We are also indebted to a referee for his detailed and thoughtful comments. The usual disclaimer applies.     

Banking,incentive constraints,and demand deposit contracts with nonlinear returns

Summary This paper presents two results regarding banking theory: (1) demand deposit contracts are essential in providing insurance against preferences shocks, as in Diamond and Dybvig (1983), if and only if the incentive compatibility conditions bind at the social optimum; and (2) for additively separable preferences with random discount factors, demand deposit contracts have the realistic feature that the interest rate paid is an increasing function of deposit balance.This paper is based on Chapter 2 of my Ph.D. dissertation submitted to the Graduate School of The University of Minnesota. I am indebted to Neil Wallace for his advice and guidance. I thank an anonymous refree for comments on a previous version of the paper. The comments from Edward Green, Nobuhiro Kiyotaki, Antonio Merlo, and Arijit Mukherji are appreciated.     

Manipulating uncertainty

Uncertainty about the distributional incidence of policy reforms may, if it impinges selectively on particular subsets of voters, alter the direction of the majority vote. This possibility should be a matter of special concern when subject to potential manipulation by a purposeful agent such as a Leviathan-like bureaucracy. This paper discusses a constitutional defense against such prospect. This paper was prepared for a conference on “Constitutional Status Quo and Prospects for Change” held at George Mason University in April, 1994. I am grateful to participants in that conference and to my colleagues at Nova, especially to Mário Páscoa, for their comments and criticisms. I also benefited from comments of an anonymous referee. Responsibility for errors remains with me.     

Technological innovation and long wave theory: Two pieces of the puzzle

Since the 1930s, there have been few attempts to recast long wave theory and address the problems raised by Schumpeter's and Kuznets' models; most work has been empirical. This paper uses an inter-industrial analytical framework to explain stagnation, downswing and recovery. The proposed rationale enables us to dispense with Schumpeter's hypothesis of periodic bunching of radical innovations.Paper presented at the Schumpeter Society Meetings held at Airlie House, Virginia, June 3, 1990. I want to thank Alfred Kleinknecht and Wolfgang Stolper for comments then. This basic model was presented for the first time in the summer of 1979 at TIMS-OSRA in Honolulu at the invitation of Bela Gold, then in a leçon au Collège de France, June 9, 1986 at the invitation of the late François Perroux, when I benefited from his comments and those of Jean Weiller. In 1989, it was presented at the University of Sherbrooke, where I benefited from Petr Hanel's comments, and at the Société canadienne de sciences économiques. I have also benefited from four anonymous reviewers' comments and advice. I thank Daniel Winer for editing.     

The local bifurcation of Ramsey equilibrium

Summary The elasticity of substitution has been proposed as one factor in the generation of aggregate fluctuations in dynamic models with incomplete markets. We study the existence of periodic solutions in a one-sector neoclassical capital accumulation model under borrowing constraints with infinitely-lived heterogeneous agents. A dynamical system representing an equilibrium profile with only the most patient agent holding capital is analyzed when capital income is not an increasing function of total capital. Conditions for the linear approximation system at a steady state to have an eigenvalue of — 1 are found. A one-parameter family of maps based on a perturbation of the production function is introduced and the dynamical system is reduced to 1 dimension via an application of a center manifold theorem. Conditions for a stable flip bifurcation are shown to hold at the steady state.This paper is dedicated to Professor Nicolas Spulber, one of the great pioneers in the study of growth theory. He brought us together and encouraged our joint work on Ramsey equilibrium theory.We thank Nicolas Spulber for his usual insightful comments and we thank Michele Boldrin for a useful discussion. We also thank a referee for suggesting improvements in the paper as well as the seminar participants at the University of Rochester and Cornell University for their comments on the paper.     

Non-stationary,stable Markov processes on a continuous state space

We extend our previous result on simple stable Markov (SSM) processes to the case where the state space is continuous. As anapplication we show the existence of a competitive general equilibrium of a cobweb model where price volatility is generated both by exogenous shocks and by stochastic, so called generating variables (that may be interpreted as sunspots) that govern the correlation of the rational beliefs of individual agents. I would like to thank Danish Social Science Foundation, The Carlsberg Foundation, Stanford Institute for Theoretical Economics (SITE) and Universita Cattolica for financial help. I would also like to thank Trinidad Casasus, Mordecai Kurz, an anonymous referee as well as participants at SITE, ESAM (2004) and ESEM (2004) for helpful discussions and comments. Peter Harremoes provided me with an illuminating counter example and Hiro Nakata provided many comments that helped improve the exposition of the paper. Part of this work is from a paper previously circulated under the title: “Sunspot rational belief structures: anonymity and endogenous uncertainty”.     

The economic possibilities of natural gas conservation: Antithetical results of prorationing regulation

State prorationing regulations for natural gas production are intended to conserve resources, prevent waste, and, if necessary, protect the rights of property owners. This paper examines the effects of conservation regulations on the stock of the resource and on production costs. Results indicate rules that do not consider the nature of the physical stock and how it is recovered, as well as the heterogeneous nature of the reservoir, may result in sub-optimal production paths for individual wells. Such inefficiencies increase production costs and may in some cases, reduce the recoverable stock; results antithetical to the intended goals of the regulation.I'd like to thank Robert H. Patrick, Duncan Woodliff, and Bob Meyers for helpful discussions, Barry Douglas, Johannes Van Lierop, and participants at the 7th Annual Western Conference Advanced Workshop in Regulation and Public Utility Economics for insightful comments on a previous version of this paper, as well as two anonymous referees and the editor of the journal for helpful comments on an earlier draft. The usual caveat applies.     

Student Assistance Schemes and the Supply of Highly Skilled Manpower: The Australian Experience*

In most countries national higher education systems provide the major source of supply of highly skilled manpower. Whilst supply from this source is a function of the demand for higher education places, their supply, and the internal efficiency and flexibility of higher education institutions, comparatively little is known of the relative importance of these determinants, what in turn determines them, and how they interreact. Any generalized answers to these questions will be strongly mitigated by institutional, demographic and socio-economic variations over time and between countries. This paper analyzes the influence of immediate financial variables, as important elements in the price of higher education, as they applied in the era of Commonwealth Scholarship Schemes in Australia.     

Sequential capacity and price choices in a duopoly model with demand uncertainty

The paper is a revised version of chapter V of my thesis (Hviid, 1987). I would like to thank Huw Dixon, Clive Fraser, Birgit Grodal, Norman Ireland, Michael Teit Nielsen, Kevin Roberts, Peter Skott, and Bente Villadsen for helpful comments and discussion, and a referee for helpful suggestions. An earlier version was presented at the Universities of Aarhus, Copenhagen, Essex and Warwick. I am grateful to participants for many helpful suggestions and comments. The usual disclaimer applies. Financial support from The Danish Social Science Research Council is gratefully acknowledged.     

Transforming economics into what? Heterodox economics and critical realism

The volume under review consists of comments on critical realismby heterodox economists. This paper addresses a number of themesfrom the book, e.g., history and reflexivity, sometimes expandingon the authors' comments on critical realism, other times respondingto them on behalf of critical realists. It considers the goalsof critical realism and ask to what extent the book furthersthem. It concludes that the high level of abstraction at whichcritical realism operates encourages those commenting on itto do so at a similarly high level of abstraction. As it stands,critical realism and the contributions to the book are too divorcedfrom the concerns of concrete economic theorising to be of greatuse to practising heterodox economists.     

Market equilibrium with heterogeneous recursive-utility-maximizing agents

Summary This paper considers a heterogeneous agent Lucas style exchange economy. For a class of recursive utility functions containing the standard additive expected utility functions, I demonstrate that there exist market equilibria characterized by stationary (ergodic) Markov processes for consumption, portfolio holdings, asset prices and the unobserved utilities. No assumptions about market completeness are made, and there are no restrictions on the underlying information filtration.Other contributions of this paper include: (i) an existence and uniqueness theorem of intertemporal utility for the general class of recursive generators; (ii) the optimum principle as well as its corresponding Euler equation derived for the agent's consumption and portfolio choice problem under recursive utility, and (iii) a single-agent equilibrium asset pricing formula which generalizes that of Epstein and Zin (1989).This paper is a part of my PhD dissertation at the University of Toronto. I would like to thank Larry Epstein for his enthusiastic supervision, helpful discussion and valuable comments. Thanks also to Tan Wang and especially Darrell Duffie for valuable comments.     

新产品开发中产品设计研究综述——基于JPIM的分析

以《Journal of Product Innovation Management》为研究对象,从作者所在地区、研究主题和研究方法三个方面对该期刊刊载的产品设计方面的载文进行梳理。结果显示:欧美国家的此领域研究已形成成熟的体系;这些国家的学者从设计管理、设计理论与方法、设计与市场和设计属性等视角探讨了产品设计;采用最多的研究方法是定量实证型研究方法,其次是定性经验型研究方法;短评专刊中载文的研究内容丰富,且有新理论被提出,但更多的研究是从不同的视角总结现有成果并指出未来的研究方向。     

商业银行产品定价理论综述

本文对国外商业银行产品定价理论与模型进行系统梳理与比较,介绍西方商业银行产品定价的一般方法与模型;对我国商业银行产品定价实践及其理论探索路径进行归纳,针对中小企业贷款及其定价方法进行分析。本文旨在为我国商业银行建立科学合理的产品定价模型、实现创新发展提供理论启示。     

A class of spatial econometric methods in the empirical analysis of clusters of firms in the space

In this paper we aim at identifying stylized facts in order to suggest adequate models for the co-agglomeration of industries in space. We describe a class of spatial statistical methods for the empirical analysis of spatial clusters. The main innovation of the paper consists in considering clustering for bivariate (rather than univariate) distributions. This allows uncovering co-agglomeration and repulsion phenomena between the different sectors. Furthermore we present empirical evidence on the pair-wise intra-sectoral spatial distribution of patents in Italy in 1990s. We identify some distinctive joint patterns of location between different sectors and we propose some possible economic interpretations. A previous version of this paper was presented at the Workshop on Spatial Econometrics and Statistics, held in Rome 25–27 May 2006. We wish to thank the participants for the useful comments received. The comments received by two anonymous referees are also gratefully acknowledged. They improved substantially the quality of our work.     

Interregional Trade Linkages and the Commercial Role: The Spanish Case

The development of a national or regional economy depends on its own actions as much as on those of its commercial partners. Trade transmits economic events from one economy to another. The type and the degree of interdependence between territories—regions or countries—determines the consequences of external actions in a region. Multipliers translate the effects of a change in one variable on the others. Using an input–output scheme to express interregional commercial flows, some coefficients are developed to classify and identify the role that each region plays in interregional trade. An empirical application of the methodology on Spanish Comunidades Autonomas is presented. A preliminary version of this paper was presented at the Fifty-Eight International Atlantic Economic Conference, Chicago, October 7–10, 2004. The authors greatly appreciate the comments and suggestions from the participants at the meeting. The authors also wish to thank an anonymous referee and editor for their constructive suggestions and comments. This research was partially supported by the DGI project SEJ2004-07924/ECON.